Value investors are set to descend upon Toronto for the Fairfax Financial annual meeting. They're making the trip from all over the world to hear Prem Watsa, the firm's CEO, talk about strategy and investing in early April.
But the crowd might be a little antsy this year. Some shareholders are uncomformable with the firm's large stake in BlackBerry and others question Mr. Watsa's decision to heavily hedge Fairfax's portfolio, which cost the company dearly over the last few years.
In some ways the situation is reminiscent of the period before 2008 when Fairfax bet heavily against U.S. financials using credit default swaps. The swaps temporarily lost a lot of money, but they made it all back, and much more, when the financial system crashed.
But investors have more to look forward to than just the annual meeting. There is a constellation of activities surrounding it that represent a Canadian carnival of capitalism.
The week kicks off with a stock picking contest sponsored by Fairfax and organized by Dr. George Athanassakos from Western University. It pits 17 teams of students from schools in Canada, the U.S., Europe, Asia, and Australia against each other in an effort to win the $17,500 in prizes.
In the first round each team submitted research papers on a select group of value stocks that were judged by a panel of experts. As a result, the 17 contenders were winnowed down to three finalists from Carnegie Mellon, the University of Toronto, and Western University.
The finalists will gather in Toronto on April 7 to make their final pitches to a panel of distinguished value investors including Mohnish Pabrai, Wayne Peters, and Kim Shannon. Win or lose, they get to attend the value investing conference run by Ivey and Dr. George on April 8.
The conference is a major event for value investors and features a slew of interesting speakers. For instance, Wilbur Ross – the renowned private equity investor – will discuss his successful investment in the Bank of Ireland, which he made alongside Fairfax. Other speakers include well known money managers Irwin A. Michael, Bruce Flatt, and Mohnish Pabrai.
Mr. Watsa will take centre stage at Roy Thomson Hall on the 9th of April to address shareholders. The formal meeting is usually a brief affair, but Mr. Watsa takes questions from shareholders for hours until exhaustion sets in – or at least until lunch.
Afterwards, investors can learn more about the companies Fairfax owns that have booths at the meeting. For instance, Thomas Cook India will be there to take bookings for, "a trip of a lifetime to India." If you're lucky, you might be able to coax a few vacation suggestions from Mr. Watsa himself.
Shareholders who want to recycle their dividends at the firm's companies can get a lift to William Ashley or Sporting Life for a little shopping. Then they might relax at the Bier Markt or the Keg.
Any way you look at it, there is plenty for value investors to do in April.